JAMAICA | Supreme Court Rules: Security Guards at Marksman Ltd are Employees, not independent contractors.

KINGSTON,  Jamaica, September 23, 2022 -  Security companies which employ guards as independent contractors in order to avoid tax liabilities are now in a tizzy, as The Supreme Court has ruled that security guards at Marksman Limited are employees and not independent contractors.

The court says Marksman is therefore liable to pay employer contributions to the National Housing Trust (NHT) as is requireeds under the law.

Despite its ruling however,  the court blocked efforts by the NHT to recover $806 million in outstanding employer  contributions as the Judge, The Hon Justice Mr, David Batts, said the NHT accepted Marksman's treatment of the guards as independent contractors for more than 30 years, until taking action in 2017.

In 2018, the National Housing Trust asked the Revenue Court to declare that Marksman is an employer under the NHT Act and should therefore be paying employer contributions to the Trust. 

The NHT alleged that Marksman owed the principal sum of $477 million for employer contributions for the years 2000 to 2016. 

Marksman denied that the company was an employer, and claimed that the guards were independent contractors.

In Friday's ruling, Mr.Justice Batts looked at how much control Marksman had over the guards, whether the guards provided their own equipment and manpower, and the extent of the guards' financial and managerial involvement in Marksman's business.

Justice Batts said nothing in the evidence of the three guards who testified for Marksman suggested they were working for themselves. 

For example, there was no evidence about them having profit and loss accounts, tax returns or profits.

Marksman had extensive control over them including where they worked and how they performed their jobs and also provided them with equipment like CUG phones, panic button, shoes, flashlight and radio.

Against this background, the judge concluded that the security guards were not in business on their own and that they work for Marksman.

He said the NHT put Marksman in an impossible, unjust, unfair, and unreasonable position by bringing a claim of nearly $478 million plus interest and penalties after all this time.

He said justice will be better served by denying the NHT's claim for back payment, and making Marksman liable for employers contributions going forward.

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